General Mills Receives a Hold from Susquehanna

By Carrie Williams

Susquehanna analyst Pablo Zuanic reiterated a Hold rating on General Mills (NYSE: GIS) today and set a price target of $58. The company’s shares opened today at $56.87, close to its 52-week high of $72.95.

Zuanic wrote:

“In a day of green for CPG stocks, GIS is up % following a 2c EPS beat (1c sales, 1c EBIT margins) and the assumption that the worst is over; all this despite FY18 EPS guidance of $3.11-3.14 vs. consensus of $3.20 (SIG $3.10), and organic sales growth anticipated to be down 1-2% (vs. -4% in FY17) vs. consensus estimates for sales growth. The company also made the argument, that it expects retailers to have both on and off line platforms, that one retailer or e-retailer will dominate, and argued it has done well in e-commerce and will continue to expand its presence in that channel (we think this has helped sentiment today on CPG stocks). At the intraday price of $56.64, GIS trades at 18.2x the mid-point of guidance, for a 10% discount to the S5CONS average of 20.3x. Relative to its 5-year average peer discount of 8% (and current predicament of growth well below historical averages), we would not call the valuation compelling. Also, relative to other stocks, in the space, we assign less probability to GIS being involved in transformative M&A (as buyer, seller, or merger of equals). We keep the Neutral stance.”

According to TipRanks.com, Zuanic is a 1-star analyst with an average return of -0.4% and a 42.1% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Constellation Brands Inc, Anheuser-Busch Inbev Sa, and Mondelez International.

Currently, the analyst consensus on General Mills is Hold and the average price target is $61, representing a 7.3% upside.

In a report issued on June 14, BMO Capital also reiterated a Hold rating on the stock with a $67 price target.

The company has a one year high of $72.95 and a one year low of $55.51. Currently, General Mills has an average volume of 3.49M.

Based on the recent corporate insider activity of 73 insiders, corporate insider sentiment is neutral on the stock.

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General Mills, Inc. engages in the manufacture and marketing of branded consumer foods sold through retail stores. It operates through the following segments: U.S. Retail, International, and Convenience Stores & Foodservice. The U.S.